Seven
vehicles were featured in iBiquity’s booth, which stretched the length of the
exhibit hall. The seventh, outfitted by consumer electronics retailer Car Toys,
is obscured on the far right.

Credit: Photo by Randy Richter, iBiquity
Digital

Is radio preparing for a future where
the marketplace is becoming increasingly competitive and unpredictable? Does
radio’s future mean terrestrial, streaming or both?

NAB President/CEO Gordon Smith has asked
broadcasters to think about those questions.

Indeed,
at the recent Radio Show convention in Dallas, Big Machine Label Group and
Clear Channel discussed their headline-making revenue/royalties deal; and
Entercom signed a similar agreement with Big Machine during the conference.

Big
Machine Label Group President/CEO Scott Borchetta said the agreement takes into
account how radio is being used now, and where it will be listened to in the
future, namely on portables devices.

Some radio owners said such direct deals are not applicable to much of
the smaller industry owners, and are specific to the large radio groups
involved.

As
the show ended, the Internet Radio Fairness Act was introduced in Congress by
Utah Republican Rep. Jason Chaffetz and Colorado Democrat Jared Polis. The bill
seeks to level the playing field for music royalties among streamed digital
audio services. Entities like Pandora, Clear Channel, NAB and CEA praised the
measure while the musicFirst Coalition opposed it. The bill promises to set the
stage for a royalties push in the new Congress this January.

While
the music royalty issue was a backdrop for broad discussions among station
owners, the nuts-and-bolts of daily operations that really take up executives
and engineers time loomed larger in the sessions and exhibit hall.

How the FCC can make life easier for
beleaguered AMs was a big topic, as was how remain radio can remain relevant in
the dash and the FM chip issue. Emmis CEO Jeff Smulyan spoke of “incentivizing”
carriers to activate and also include radio chips in their devices.

Here is a final roundup of the
more notable news from the fall event and afterwards:

DIGITAL
‘WILL HELP
RADIO
GET SOME
OF
ITS SEXY BACK’

Mobile
is the best opportunity for radio in the digital space, according to Clear
Channel President
of National Ad Platforms Jim Castelli.

“It
fits for radio and it fits into what people use the phone for,” Castelli said
at the Radio and Internet Newsletter Summit. “When it’s on a mobile phone it just sounds like your best friend
telling you to go buy that car or go see that movie.” That can be a powerful
tool for advertisers, he believes.

FCC Audio Division Chief Peter Doyle

Credit: Photo by Leslie Stimson

However
Castelli believes radio has an image problem. While the medium still resonates
with a lot of consumers and has “huge” reach, traditional radio has lost some
of its luster among advertisers, though he still believes it’s still one of the
“big three” for media, along with TV and the Web.

Digital,
he said, will help radio “get some of its sexy back.” Digital, meaning streamed
radio, “amplifies everything we know is great about radio. It’s personal, it’s
local. It’s social,” he said.

He
encouraged attendees to think of digital as “in addition to,” not “instead of”
broadcast radio.

FCC COULD ACT SOON
ON FM TRANSLATOR CAPS

Look for the FCC to take action
soon on the agency’s proposed translator caps.

In
order to sort through the roughly 6,500 pending FM translator applications to
reach a more manageable amount as well as preserve frequencies for more
low-power FM stations, the commission in March proposed limits. It proposed a
national cap of 50 applications per ownership group and a per-market cap of one
application in the top 156 radio metros.

Four
broadcasters, including Educational Media Foundation, have challenged the caps,
calling them arbitrary. They’ve asked the agency to reconsider the limits.

Wilkinson
Barker Knauer partner David Oxenford, who represents EMF, said “We were
surprised by the number of people who objected to a market cap of one. I think
there are issues for the FCC to work out.”

FCC Audio Division Chief Peter Doyle
characterized the petitions as asking the commission “to tighten up some of the
definitions in the order.” The agency is close to sending those recommendations
to the commissioners on the eighth floor as an order on reconsideration, he
said.

“We see translator processing as
a first step. We want to push that down the tracks first,” Doyle said, before
the agency opens an application window for LPFMs. He can’t predict how long it
will take to resolve the translator issue.

Meanwhile
Lerman Senterattorney Dennis Corbett
says radio owners who don’t have a pending FM translator app and who want a
translator should act now to “get their engineer to scour the FCC database to
find a dance partner,” meaning a radio group that’s approaching the cap. “You
need to approach them now. If they approach the cap, they’ve got tough
decisions to make,” he said. A potential agreement with other broadcasters will
affect which ones they keep.

PAI’S CALL FOR AM
REVIEW IS WELL RECEIVED

Broadcasters
who owns AMs are cheering FCC Commissioner Ajit Pai’s call for the agency to
look at AM reforms to help the service.

Bryan
Broadcasting Vice President/General Manager Ben Downs, who’s also an NAB radio
board member, to Pai’s call for the formation of an AM Revitalization Committee
in 2013 by calling it the best news he’s had in some time. “The commissioner
realizes that AM has an important role to play in serving communities and realizes
that rules put into place 90 years ago have little relevance today,” he told
Radio World. “I hope he’s willing to embrace broad changes to the rules because
no amount of programming nor local service will allow a daytimer to serve their
community in morning drive. AM needs 21st century rule changes and a new path
to implement 21st century technology.”

Womble Carlyle attorney John Garziglia
says most of the AMs that need help are in medium and small markets.
“If you look at AM operators as not just
having a stick in the ground, FM translators is one of the few things that can
be done now.”

There
are several things the FCC can do immediately to help them, however in speaking
to Radio World, he focuses on two items: the commission should not dismiss pending
FM translator applications from 2003 and should expand how many AMs can operate
on FM translators.

A
way of accomplishing that today, Garziglia says, would be for the agency to
ease its “no hopping” restriction. “Hopping” is when a translator owner, trying
to move closer to a more populated market, does that by degrees, even perhaps
operating the translator from a truck by the side of the road in one location
for a day, then shutting down and moving as soon as the next location is
approved. “The truck people are doing it this way because it’s the only way
they can do it” under current FCC rules, according to the attorney.

Asked
whether moving some AMs to spectrum now used for the television analog Channels
5 and 6 is a good idea, Garziglia says yes, however that could potentially face
a court challenge from TV owners that wish to remain on those channels and new
receivers would be needed in the marketplace. Even if the process went
smoothly, it could take 10 years, Garziglia said.

EXECUTIVES:
RADIO NEEDS TO
INCENTIVIZE
CARRIERS ON FM CHIPS

How
can radio persuade wireless carriers to embed FM chips in mobile devices, or
activate the chips that are already there?

A legislative solution doesn’t appear to be at hand, nor is it the way
to go, radio executives agree, so the focus is now on incentivizing the
carriers.

Shortly
after the show, Emmis CEO Jeff Smulyan said the tenor of the tone of the
discussions with the carriers has changed dramatically for the better; he
believes radio is closer to nudging the wireless industry on the issue.

“Let’s reach the best business interests we can through
negotiation,” Smulyan said.

At the show, Cumulus Media Chair/CEO Lew
Dickey says there needs to be an educational process for consumers — presumably
by radio — to let them know an FM chip is in their phone. Part of the campaign
would be to prod consumers tell their carriers know they want those chips
activated. Radio needs to incentivize the carriers, who also are radio
advertisers, he said, adding that some 15 million cars are sold in the U.S.
each year, yet twice as many cellphones are sold.

Smulyan
said radio is poised to give the carriers “millions in subsidizing.” The
industry hopes to make it worth the while for the carriers to embed or activate
existing FM chips, Smulyan said.

SMARTPHONE
CHIP WORK
NOW INCLUDES
FM ANALOG

Both Emmis CEO
Jeff Smulyan and Cumulus Media Chair/CEO Lew Dickey say having an FM radio chip
is vital, however that development effort is now tied to FM analog as well as
HD Radio.

Shortly after the show, Emmis announced it would sell its interactive
division to Marketron, in part to focus on TagStation, the broadcast insertion
system that makes it possible for a consumer to interact with a radio station
enabled by the connectivity of the mobile device.

The so-called “backchannel” ecosystem and smartphone app debuted at the
spring show as an NAB Lab-funded effort of Emmis, Intel and iBiquity
Digital.

TagStation now has a focus on analog FM using RDS as well as HD. Emmis
Chief Technology Officer Paul Brenner described it as “baby steps.” While the
group built a prototype smartphone to demonstrate to carriers the data value of
an FM HD chip, carriers have been reluctant to embrace the concept, he said, noting
that the HD chip would also cost carriers more than $2 per phone, above the
their typical ceiling of 40 cents per device for new technology.

For a variety
of reasons, HD stations too have been slow to implement Artist Experience and
that gives carriers pause as well. “TagStation works for analog, too. So even
analog gets some of the visual experience” of the audio synched with the visual
on the receiver display, Brenner said.

“We tell automakers ‘This is radio now. It’s not just a call sign and
frequency,’” said Brenner. And that, in turn, opens doors with the carriers and
changes those conversations, he said.

Indeed, project developers are now using the term “hybrid radio” when
talking to device makers and carriers. Emmis Interactive Director of Product
Development Ben Husmann demoed a Samsung Galaxy S smartphone that includes an
activated FM chip. He demoed a station’s “text to win” campaign; with a station
list populated by the phone number.

“Why are we doing this?” he asked rhetorically. “Because when we talk to
a chipmaker, we can say, ‘This is your chip on a Samsung. Here’s what’s
possible. The conversation is, what is radio doing to innovate?”

Emmis is also studying what kind of data stations can get from a
listener using a device. “We know what station they listen to and where they
were. We know they heard a particular event and how they viewed it,” he
said.

Emmis says
it’s signed some top 10 market radio broadcasters for TagStation but hasn’t
released their names.

AUTOMAKERS
GET HD COMPLAINTS;
TIME
ALIGNMENT MAY BE AUTOMATED

For years, there were more stations
transmitting digital signals than there were HD-equipped cars on the road. Now
automakers are ahead of broadcasters, rolling out more cars equipped with
advanced HD Radio receivers that feature dynamic visual displays.

But
even when HD stations do implement HD Radio or put a multicast channel on the
air, they’re not always able to pay attention to the alignment of the analog
and digital signal. That’s a problem, because complaints about audio quality
are starting to arrive at dealerships.

IBiquity Senior Vice President of Broadcast
Programs & Advanced Services Joe D’Angelo ticked off several: Customers say
the HD often echoes as if two signals are being received slightly out of time
or the audio sounds as if the station is “skipping.” Other complaints include
“the radio doesn’t pick up HD stations, ever.” Or “The HD goes in and out.”

Many
of these complaints involve alignment of the analog and digital signals.

Some
transmission and monitor manufacturers are working with iBiquity to determine
whether that function can be automated, with an eye toward having those
upgrades ready for the spring NAB convention. That commercialization would be
helped if monitor manufacturers saw an interest from stations in that feature, D’Angelo
said.

Owners have been slow to embrace the advanced
data features that can make a radio display look like its competitors, such as
satellite radio or Pandora, in the dash. Only some 400 stations have so far and
that’s a problem, according to HD proponents; they believe that if stations
don’t step it up, automakers will move radio “down the center stack of
priorities in the dash,” so to speak.

IBiquity Digital President/CEO Bob Struble stressed
the point to Radio World, noting that 9 million HD Radio receivers have been
sold to date.

Ninety-four
automotive models in calendar year 2013 will have HD Radio as a standard
feature. “You’ll be hard-pressed to find a new car in the U.S. that doesn’t
have it,” predicted D’Angelo.

Over
the next 12 months, eight OEMs will launch Artist Experience in 19 models. With
AE, the digital audio is synched with visual elements for a dynamic display in
today’s large-screen in-dash enfotainment systems.

The
company is stressing the importance of station owners raising their digital
power levels to implementing AE or iTunes Tagging.

Clear
Channel has implemented AE at many stations. Greater Media has implemented AE
on all of its digital FMs, and CBS Radio will be rolling out AE in its top four
markets by year-end, according to Senior Vice President of Engineering Glynn
Walden.

“There
are people implementing it,” said Emmis CTO Paul Brenner, but that number
“needs to get better.”

JOURNAL EXPANDS
HD COMMITMENT

About half of Journal Broadcast Group’s 35 stations are
transmitting in digital and the plan is to take the rest of the group digital
next year. So says Vice President/Chief Technology Officer Andy Laird. He said
the company is raising FM digital power on three stations now and working on
implementing Artist Experience, with plans to also roll that out next year.

Journal would then join other radio groups, like Clear
Channel and Greater Media, in implementing the advanced data feature of HD Radio
in which the audio is synched with visual images on a receiver display.

Laird said he’s standardized a lot of what goes into
organizing, storing and transmitting album art with the digital signal.

Ford Business Development Analyst for Mobile Scott Burnell
estimated that 50 percent of new cars available now have some type of
large-screen infotainment system. Consumers “want everything,” basically, “the
ability to do what they do outside the car” and to bring that functionality
into the vehicle, he said.

That percentage is expected to grow to roughly 80 percent
next year.

IBiquity Digital President/CEO Bob Struble said “We’re
getting to a point where if you’re not digital at your station, you’re going to
be at a disadvantage,” noting that the new auto infotainment systems just
display the call signs of an analog station.

Not everyone is onboard the digital train.

Cherry Creek Radio CEO Joe Schwartz is afraid radio will be
split among those stations that can and those that cannot afford to spend
thousands of dollars on new technology.

“It would cost my company in excess of $10 million to go to
an HD platform. That is not going to happen.” He knows other small broadcasters
“who probably feel the same way.”

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